Cattlemen's Capitol Concerns

February 22, 2008

February 14, 2008 - The Cattlemen's Capitol Concerns (CCC) is a weekly report from Washington, D.C., giving an up-to-date summary of top policy initiatives concerning the cattle industry; direct from the National Cattlemen's Beef Association (NCBA). NCBA Members Set Policy Priorities: The 2008 Cattle Industry Annual Convention and Trade Show concluded Saturday, February 9th in Reno, Nevada, with the NCBA Membership meeting. During the week, NCBA producer-members discussed many issues important to the cattle and beef industries, including:

Beef Checkoff Program: Cattlemen directed NCBA to ask Congress to approve a process that will allow producers to vote on enhancements to the Beef Checkoff Program. NCBA policy doesn't askfor a specific increase in the checkoff rate, but requests that Congress ensure that the program is adequately funded.

Renewable Fuels: NCBA continues to favor a sunset of the 54-cent tariff on imported ethanol and the 51-cent per gallon fuel blending tax credit. These programs are set expire in early 2009 and late 2010, respectively. NCBA members adopted a policy last year requesting that Congress not extend these subsidies beyond their current time frame.

Animal Identification: NCBA still supports a voluntary, market-based approach to animal identification. Current member policy was updated to recognize the legitimate benefits premises registration numbers can provide in meeting animal health emergency requirements -as long as they do not impede normal cattle movement.

Food Safety: NCBA members reaffirmed existing policy calling for NCBA to work with all segments of the beef industry, as well as government officials, to reduce the prevalence of E. coli O157:H7. This policy also calls for NCBA to seek the regulatory approvals necessary to implement industry wide sound safety practices.

Nutrition and Health: NCBA reaffirmed its statement of principles which supports providing factual information to consumers, continued research on beef's nutritional qualities, and a science-based approach to portion sizes, diet and exercise.

Animal Health: Cattlemen adopted policy expressing support for several educational and financial aid programs that will help address the nation's growing shortage of large animal veterinarians. All policies adoptedduring last week's Membership meeting are now subject to approval by more than 30,000 NCBA members nationwide. Convention results become official at the conclusion of the mail-in ballot process concludes in March. NCBA Names New Officers: In conjunction with the 2008 Cattle Industry Annual Convention, NCBA members elected their new slate of officers for the coming year.

Andy Groseta, a rancher from Cottonwood, Ariz., was elected to succeed John Queen as NCBA president. Groseta says he wants to continue to grow and strengthen NCBA, especially by creating more opportunities for young people to succeed in the cattle industry.

Gary Voogt of Marne, Mich., was electedNCBA president-elect. During the past year, Voogt servedas chairman of the Federation of State Beef Councils Division of NCBA.

Steve Foglesong, a cattleman from Astoria, Ill., was elected NCBA vice president. Foglesong served last year as NCBA Policy Division chairman and NCBA Membership Committee chairman.

Bill Donald, a rancher from Melville, Mont., was elected as NCBA Policy Division chairman, succeeding Foglesong in this leadership position. Also at NCBA's Membership meeting, NCBA paid tribute to Paul Hitch,a cattleman and longtime livestock industry leaderfrom Guymon, Oklahoma.Hitch is a former chairman of the NCBA Policy Divisionand NCBA Live Cattle Marketing Committee. Hehad served the past two years as vice-president and president-elect of NCBA. Buthe was unable to accept a term as NCBA president, due to an ongoing bout with cancer. Farm Bill Update: Ag groups and policymakers are still waiting for the House of Representatives to name their Farm Bill conferees. The Senate named their conferees last week. Meanwhile, House Agriculture Committee Chairman Collin Peterson (D-Minn.) and Ranking Member Bob Goodlatte (R-Va.) have been working on compromise language aimed at appeasing the Administration's concerns over Farm Bill costs and policy differences. Peterson and Goodlatte wrote a letter February 9th to “the Farm Bill Community” acknowledging frustrations with finalizing a 2007 Farm Bill. “We believe it is time to put something forward that is realistic and move forward with the conference committeeÉ.We do not believe that any strategy involving a veto will be good for the country,” the letter says. The letter also states that every effort is being made to outline a framework that is acceptable to the House, Senate and Administration before the President's Day recess in order to pass a Farm Bill before the expiration of current law on March 15. In response to proposed compromise language, Ag Secretary Ed Schafer and Deputy Secretary Chuck Conner said they are encouraged. “With these reforms and with acceptable offsets for the $6 billion of additional spending, we believe this offer represents a package that is moving in a direction of a bill that the President would sign,” said Schafer and Conner in a statement late last night. “We urge the House and Senate to use this proposal as the framework for a conference agreement. Without action sometime soon, we risk not reaching a final agreement that would provide a long-term safety net for America's farmers and ranchers.” NCBA is monitoring any action by the House of Representatives to appoint conferees. Until that takes place, House and Senate Agriculture Committee staff continue to address differences between the House and Senate bills. The House Ag Committee has developed Farm Bill conference side-by-side documents that compare provisions in both bills. These are posted on the House Ag Committee website at: www.agriculture.house.gov. Appropriations Hearings: The House Appropriations Subcommittee on Agriculture held a hearing on February 13th to review the Fiscal Year 2009 budget for the Department of Agriculture. Secretary of Agriculture Ed Schafer and Deputy Secretary Chuck Conner testified. A top priority for Subcommittee Chair Rosa DeLauro (D-Conn.) is timely implementation of mandatory country-of-origin labeling (COOL). Schafer and Conner assured her that USDA was focused on implementing COOL on September 30, 2008, although the department's compliance costs for the program remain a concern. Subcommittee ranking Member Jack Kingston (R-Ga.) applauded the department for including in the proposed budget $59 million for bio-based fuel research. This is nearly a $20 million increase from last year. On the issue of animal identification, Schafer and Conner told the subcommittee that the program should remain voluntary and said the livestock industry works best in a market-based situation. USDA intends to use $24 million budgeted this year for continued cooperative agreements to register premises. About one third of U.S. premises have been registered to date. BLM and Forest Service Announce 2008 Grazing Fee: The Federal grazing fee for Western public lands managed by the Bureau of Land Management (BLM) and the U.S. Forest Service (USFS) will be $1.35 per animal unit month (AUM) in 2008, the same level as it was in 2007.The fee, determined by a congressional formula and effective on March 1, 2008, applies to nearly 18,000 grazing permits and leases administered by the BLM and more than 8,000 permits administered by the USFS. Under the 1978 Public Rangelands Improvement Act, the grazing fee cannot fall below $1.35 per AUM, and any increase or decrease cannot exceed 25 percent of the previous year's level. (An AUM is the amount of forage needed to sustain one cow and her calf, one horse, or five sheep or goats for a month.) The annually adjusted grazing fee is computed by using a 1966 base value of $1.23 per AUM for livestock grazing on public lands in Western states. The figure is then adjusted according to three factors Ð current private grazing land lease rates, beef cattle prices, and the cost of livestock production.In effect, the fee rises, falls, or stays the same based on market conditions, with livestock operators paying more when conditions are better and less when conditions have declined. “Public lands ranchers support the formula used by the government to determine the grazing fee,” says Jeff Eisenberg, executive director of the Public Lands Council and director of federal lands for NCBA. “Declining beef cattle prices and increased production costs have hit our ranchers hard, so we think the new fee is in line with the economic factors ranchers are facing right now.” The BLM acknowledged that without the requirement that the grazing fee remain at or above $1.35 per AUM, this year's fee would have dropped below one dollar per AUM because of these factors. The $1.35 per AUM grazing fee applies to 16 Western states where grazing permits on public lands are administered by the BLM and the Forest Service. The states are Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming. The Forest Service applies different grazing fees to national grasslands and to lands under its management in the Eastern and Midwestern states and parts of Texas.The national grassland fee will be $1.35 per AUM, down from $1.37 in 2007, and will also take effect March 1. The fee for the Eastern and Midwestern states and parts of Texas will be determined later this month. The BLM manages 258 million surface acres. Most of this public land is located in 12 Western states, including Alaska. The Forest Service, an agency of the U.S. Department of Agriculture, manages 193 million acres of Federal lands in 44 states, Puerto Rico, and the Virgin Islands. Economic Stimulus Bill: President Bush signed February 13, 2008, H.R. 5140, the Economic Stimulus Act of 2008. The Senate voted late last Thursday to add key elements to the House stimulus plan, and the House quickly approved these changes sending the bill to the President's desk. Within the new bill, cattlemen will benefit from small business tax improvements such as a near-doubling of the Section 179 deduction limitations (from $128,000 to $250,000), as well as a significant increase (from $510,000 to $800,000) in the phase-out threshold. The package also includes helpful enhancements to bonus depreciation, although the proposed language regarding Net Operating Loss (NOL) carry back rules was removed from the final bill. Colombian Trade Update: NCBA, as part of the Latin America Trade Coalition, sent a letter to Capitol Hill late last week in support of the U.S.-Colombia Trade Promotion Agreement (CTPA). The Latin America Trade Coalition is a broad-based group of more than 700 U.S. companies, business and agricultural organizations, and chambers of commerce. The Andean Trade Preference Act (ATPA) allows 90 percent of all imports from Colombia to enter the U.S. market duty free. By contrast, Colombia's average duty on imports from the U.S. is more than 50 percent for key agricultural exports. “In short, Colombians enjoy nearly free access to our market while our access to theirs remains limited,” the letter says. “CTPA will remedy the unfairness of today's U.S.-Colombia trade relationshipÉ Clearly! , Congress can lend a helping hand to workers and farmers in both the United States and Colombia by approving this landmark agreement.” Under the Colombia TPA, prime and choice graded U.S. beef will receive immediate duty-free and quota-free access upon implementation of the agreement. In related news, the House Committee on Ways and Means today approved by voice-vote H.R. 5264, which provides a ten-month extension of the Andean Trade Preference Act. The measure is expected to be considered by the full House during the week of February 25th. The current set of Andean preferences is set to expire on Thursday, February 28th. NCBA, along with 27 other agriculture and food groups sent a letter to Congress urging them to oppose a long term extension of the Andean Trade Preferences Act, and to approve the Colombian Trade Promotion Agreement. Regarding today's action by the Committee, Chairman Charles B. Rangel (D-N.Y.) said a shorter extension was decided upon to accommodate the range of opinions on the issue of renewal. California Family Wins National ESAP Award: The Yolo Land & Cattle Company was named the 2008 Environmental Stewardship Award Program (ESAP) National Winner last week at an awards event held in conjunction with the 2008 Cattle Industry Convention in Reno. In the summer of 2007, the owners of Yolo Land & Cattle Company Ð the Hank Stone family Ð were initially chosen as one of the regional winners, representing NCBA's Region VI. The prestigious award program - sponsored by National Cattlemen's Foundation, NCBA, Dow AgroSciences, USDA Natural Resources Conservation Service and U.S. Fish & Wildlife Service - is now in its 17th year. “Recognizing the importance of sustainability has allowed the family to collaborate with multiple local, state, and national groups to restore hundreds of acres of grasslands, riparian habitat, and stock ponds with California native flora,” said Iowa cattleman Dave Petty, chairman of the selection committee. “Yolo Land & Cattle Company has served as leaders in the industry and a model of innovation. By placing large portions of their land into conservation easements, the family ensures the future of the operation for generations to come.”